Illinois

“INFRASTRUCTURE” TAXES HELP POLITICIANS, NOT COMMUTERS

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Raising taxes for “infrastructure” is a scam that helps politicians but not commuters, according to Jim Tobin, president of Taxpayer Education Foundation (TEF).

“Politicians want to raise taxes for infrastructure because new projects give taxpayers the impression they are getting shiny new things for their money,” said Tobin. “But, in fact, these projects actually harm commuters.”

“Several studies by transportation expert Randal O’Toole, Senior Fellow at the Cato Institute, show that with the exception of New York City subway ridership, the future for the rest of the government transit industry is dim. Yet billions of dollars are still being poured into declining government transit systems instead of improving roads.”

“O’Toole provides some startling statistics to illustrate these facts.”

  • Other than New York City subways, nationwide ridership fell 1.2 percent for 2019 as a whole.
  • When compared with 2014 ridership, 2019 ridership fell in 44 out of the 50 largest urban areas.
  • Transit buses, including commuter buses, trolley buses, and bus-rapid transit as well as conventional buses, carried fewer riders in 2019 than in any year since 1939.
  • Light rail is also doing poorly, losing more than 4 percent of its riders in 2019.
  • Government Transit is not healthy in almost all urban areas. Los Angeles and Washington ridership peaked in about 2008; Chicago in 2012; and the others in 2013 or 2014.  If government transit can’t thrive in Chicago, which has the nation’s second-largest downtown, then it is really becoming a one-urban-area industry (New York).
  • Whenever it opens a new light-rail line, Los Angeles loses five bus riders for every light-rail rider it gains, and even light-rail ridership declines in years that it doesn’t open new lines.

“O’Toole shows that building government rail transit usually does more harm than good to a transit system. Gasoline is cheap and autos provide people access to far more jobs and other economic opportunities than transit,” said Tobin.

“Interstate Highways, called the world’s best transportation system, were paid for entirely out of federal and state highway user fees. There is little justification for raising more taxes and trying to get people out of their cars and onto transit, which in turn means there is little justification for the tens of billions of dollars of annual subsidies American taxpayers give to the government transit industry.”

Politicians Pave Way for Municipal Income Tax

Chicago –After promising their overpaid bureaucrats lavish pensions, local governments have come up with a novel new way to squeeze money from taxpayers. In an audacious move, local politicians are eyeing the liberal powers of Home Rule for the purpose of imposing a municipal income tax on Illinois taxpayers.

“Home Rule is Home Ruin, and the first step in creating a municipal income tax”, stated Jim Tobin, president of Taxpayers United of America. “Home Rule in Illinois strips the power of the taxpayers to vote on new or unlimited increases in taxes, and widens the scope on what can be taxed.”

“We are helping three communities fight Home Rule referenda in the March 17, 2020 primary election. Burr Ridge, Westchester and Lynwood must defeat the implementation of Home Rule to prevent unlimited and burdensome taxation. Implementation of Home Rule enables a community to begin the process of imposing local income taxes that are deducted right from your paycheck!”

“After November 3, we will see the reality of this assault on taxpayers. There are so many new taxes being imposed right now that government bureaucrats are waiting until after the general election to usher in this newest taxation nightmare, a Local Personal Income Tax.”

“Municipal bureaucrats always promise not to abuse Home Rule power, but once they have it, they always abuse it by imposing excessive taxes and fees to fund their pet projects despite the ever-present government pension obligations.”

“The Illinois Municipal Retirement Fund (IMRF) is heavily subsidized by local property taxes. It is also true that IMRF pensions must be paid before all other expenses. Local bureaucrats will do whatever it takes to cash their paychecks and their pensions, including imposing a new individual income tax. On top of all this, remember that IMRF pensioners are also eligible for social security.”

“We are helping local residents in Burr Ridge, Westchester, and Lynwood defeat Home Rule on March 17. Links to the Vote No flyers for each community in the fight can be found below. Please download and share with your friends and neighbors in these communities.”

Click below to view or download:

Burr Ridge Vote No Flyer

Westchester Vote No Flyer

Lynwood Vote No Flyer

“Home Rule does nothing for taxpayers. It forces us to relinquish one of our most important rights and that is the right to vote on tax increases or new taxes. Say goodbye to your ability to voice your opinion through voting on these, among other powers you hand to politicians:

1) Raise property taxes without referendum and removes the 1.9% cap on village property tax increases.

2) Is the first step in creating a local income tax.

3) Impose new taxes in the form of fees, licenses, and regulations.

4) Expedite seizures of private property.

5) Give city property to private interests without competitive bidding.

“I urge you to vote no on any and all Home Rule referenda. It’s never a good idea to give more power to government bureaucrats”, concluded Tobin

ILLINOIS’ ONLY HOPE MAY BE BANKRUPTCY

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A recent article by Mark Glennon of Wirepoints states that turning Illinois around is vital to the national economy. Illinois is a drag on the national economy, and the state’s GDP has lagged the nation’s significantly for ten years. According to Glennon, “A federal bailout is happening automatically, at least in a small sense, in the form of food stamps, housing assistance, Medicaid and similar programs. A fresh start for Illinois would reduce its federal tab for those costs and grow Illinois’ tax base for federal revenue.”

For a state to formally go bankrupt, the U. S. Congress would have to pass legislation enabling that. In Illinois’ case, Glennon thinks Congress would.

David Skeel, a law professor at the University of Pennsylvania who also serves on Puerto Rico’s oversight board wrote that the “constitutionality of bankruptcy-for-states is beyond serious dispute.”

Congress would only be offering states the option of using bankruptcy, just as it has already done for municipalities; nothing would be forced on states.

As for the left’s fear that the power of bankruptcy would reduce pension payments, the Bankruptcy Code would not be expanded “as is” to states. Changes would be made on which all sides could find common ground. For example, a bankrupt government can opt to keep or renegotiate whatever labor contracts it has.

As for bondholders, says Glennon, one should “shed no tears for existing bondholders. They took the risk that bankruptcy law could be changed to impact them.”

“It’s becoming clear that there is no long-term alternative,” said Jim Tobin, president of Taxpayers United of America (TUA). “As Glennon points out, “This isn’t about whether bankruptcy is a good option. It’s about whether it’s the only option.”

“Illinois is functionally bankrupt,” said Tobin, “and the cause is runaway government employee pensions with unfunded liabilities so huge that it is mathematically impossible for the state and its municipalities to tax their way out of this financial black hole.”

“Illinois is the nation’s extreme outlier when it comes to pension shortfalls. The state has a $241 billion shortfall in its five state-run pension funds. Illinois’ pension shortfalls equal 28 percent of the state’s GDP. Illinois’ death spiral gets worse and worse, and bankruptcy for the state looks more and more desirable.”

“While we’re waiting for this drastic measure, the state of Illinois can help its citizens by passing a law to enable all local governments to declare bankruptcy. It also should cut state taxes to stimulate its sluggish economy.”

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DISCLAIMER

Taxpayers United Of America: (TUA). is a nonpartisan, 501(c)(4) taxpayer advocacy group. Founded June 27, 1976 in Chicago, Illinois by activist and economist Jim Tobin, TUA works on behalf of taxpayers to reduce local, state, and federal taxes. In the past forty years, TUA has saved taxpayers more than $200 billion n taxes and has become one of the largest taxpayer organizations in America. Check All posts. s.

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